PVR sees upswing in biz, higher ticket prices ahead

Written By Unknown on Senin, 22 April 2013 | 15.45

PVR 's business this season has been on upswing, unaffected by the ongoing Indian Premiere League (IPL) compared to previous years, says Pramod Arora, President & CEO of the company. Arora expects a rise in the average ticket prices in the near term in-line with the inflation, anticipated at 7-8 percent.

The company has a debt of around Rs 640 crore. It had recently acquired multiplex chain Cinemax . Arora expects about 8 to 10 percent synergy benefits coming into the balance sheet of PVR for FY13.

Below is the verbatim transcript of Pramod Arora's interview on CNBC-TV18

Q: How has business been and importantly in the current quarter considering that Indian Premier League (IPL) will have its own impact in terms of competition?

A: The business seems to be on the upswing and IPL has not impacted the business as much as we had anticipated in the previous years. However, there have been constant flows of movies that have been coming in, which builds up the case that the occupancies are up since same quarter last year. Therefore, IPL is not having any negative impact on the business and the numbers look promising.

Q: If things are not getting impacted and are looking up as well from business point of view, is there a case for the average ticket price to go up, currently you stand at Rs 174? Over one year period, how much increase in ticket price do you anticipate?

A: It is linked to the inflation indices the way the ticket prices go up. However, predominantly one will end up seeing a rise in the ticket prices inline with inflation, which is anticipated about 7-8 percent. It will be the rise in average ticket prices.

Q: At the moment what is your debt situation? How will interest cost pan out from hereon?

A: We have about Rs 640 crore of debt on both the entities taken together. The EBITDA is reasonably positive wherein we do not see any problems and have sufficient coverage.

Q: Will there be any impact from rating agencies on your cost of money?

A: We do not see that happening.

Q: You have acquired Cinemax how are the synergies progressing and how much more of an incremental synergy can we expect in FY14?

A: The process of synergies is in progress and we are seeing a lot of positive synergies coming in, in terms of economies of scale whether it is capital buying or programming of films or the concession strategy. In the year going by, we should be looking at about 8 to 10 percent synergy benefits coming into the consolidated company.

Q: Does it give you some kind of monopoly power since you have an overwhelming majority of exhibition halls and we will therefore, see margins improve?

A: One, we would see the margins improve but not monopolistic situation. The margins are going to improve considering the economies of scale that will state aggregating in the business. We do see these economies of scale helping us improve the margins in the business. In terms of monopolistic situation, I do not see that sort of angle to the acquisition.


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